Subject: SEC's proposed rules (S7-25-97)
Date: 11/27/97 10:41 AM
Chairman Arthur Leavitt
Securities and Exchange Commission
450 5th Street NW
Washington, D.C. 20549
Dear Chairman Leavitt:
I am writing to make known my serious objection to the SEC's
proposed rules (S7-25-97). These rules, if adopted, would
seriously undermine the shareholder process and give companies free
license to make dangerous, shortsighted management decisions without
review by, or accountability to, their investors.
Today's shareholder process is a responsible one and a powerful tool of
democracy. Shareholder participation in corporate governance has led to
many important changes in corporate behavior. For example: the establishment
of clear standards for corporate environmental behavior, divestment in South
Africa, and an end to the use of child labor and corporate governance,
to name a few.
The shareholder process allows for dialogue between shareholders and
corporate decision-makers and helps find real solutions to urgent social,
environmental, labor and human rights issues. The following provisions
are especially problematic:
* The new rules would block shareholder resolutions that address less
than 3% or $10 million of a company's business. This provision would
effectively eliminate many emerging issues or business practices that
are not easily measured in dollars such as sweatshop labor or pollution.
The new rules provide an automatic qualification for any resolution
sponsored by the owners of 3% of a company's shares of stock. For most
Fortune 500 companies, 3% of the shares means more than $1 billion worth
of stock, which means only the biggest investors could wield this kind of
clout. This is grossly discriminatory.
Please protect the rights of American shareholders to address irresponsible
corporate behavior through the shareholder resolution process and stop these
regulations from going through.
Sincerely,
Barbara McCarthy
3500 64th Avenue
Oakland, CA 94605
510-636-1483